Ukrainian TV viewers watched agog on Monday as representatives of the world's two biggest steel groups, Mittal and Arcelor, drove up the price for their country's largest metals producer, Kryvorizhstal, in a frenzied auction carried out before the cameras.
The auction saw Mittal Steel, the world's biggest steel producer which is controlled by Lakshmi Mittal, Britain's richest man, secure control of the Ukrainian steel mill with a killer bid of 24.2 billion hryvna (US$4.78 billion).
The early stages of the auction had swiftly seen off the locally based LLCSmart-Group, after Arcelor and its Ukrainian partner opened the bidding at 12.6 billion hryvna when all the bidders put sealed envelopes into a glass bin.
The auctioneer, eye-witnesses said, raised his gavel and counted out one, two, before Arcelor and Mittal raised their offers by lifting white placards offering another 100 million hryvna.
With its winning bid Mittal takes 93 percent of Kryvorizhstal.
The auction was the latest stage in Ukraine's Orange Revolution, the pro-democracy movement headed by President Viktor Yushchenko, the politician poisoned and disfigured for life by his opponents. Now president, he is set on leading his country into eventual membership of the EU.
The televised auction was an exercise in transparency designed to prove to fractious Western companies that Ukraine, despite the recent enforced resignation of its premier, Yulia Tymoshenko, and reform setbacks, is a good place to do business.
The sell-off contrasted with the murky privatizations of state-run enterprises in neighboring Russia to men who subsequently became billionaire oligarchs.
It also overturned last year's sale of the same company for just US$797 million to a local firm controlled by Viktor Pinchuk, the son-in-law of Leonid Kuchma, Yushchenko's predecessor and bitter rival in rigged elections.
Yushchenko, who repeatedly called last year's sell-off a "theft," had to resort to the courts to nullify the deal.
Mittal, who praised the auction as "the most transparent and professional process in selling state enterprises," said Kryvorizhstal could become the group's largest steel plant in the region and offer the company US$200 million in cost-savings by the end of next year.
The Ukrainian plant adds 10 million tonnes of steel crude capacity and 6.7 million tonnes of shipments to Mittal's empire, which shipped 42.1 million tonnes last year. Mittal, which plans to export some of its crude to other plants, said it sat on 1 billion tonnes of iron ore reserves, producing 17.1 million tonnes last year.
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